Thursday, 12 December 2013

Role of the Financial Services Sector
in

Expanding Economic Opportunities

Financial Services are fundamental
to economic growth and Development; •Banking, savings and investment, and debt and equity
financing, all help us to save our money, guard against uncertainty, and build
credit, while enabling our businesses to start up, expand, -increase
efficiency, - and compete in local and international markets;

•The
financial sector provides six (6) major functions to the companies (investors)
and the savers. They provide the payment services;

•matching
savers and investors;

•generating
and distributing of crucial information,

•allocation
of credits efficiently;

•pricing,
pooling and trading risks;

•and
finally the increasing of asset liquidity.

•Financial
services is the largest sector in the world in terms of earnings, comprised of
range of businesses including merchant banks, insurance companies, and
development institutions;

The commercial banks (Westpac, MBF
and ANZ) including the Tonga Development Bank do have the expertise, the
reputation, and geographic reach (Vava’u, Ha’apai, ‘Eua. And the Niuassss) to
have significant direct impact and engagement to change the way the entire
domestic market operates.

•They
use deliberate strategies to expand economic opportunity through business
models that serve us individuals and small businesses as clients.

•They
also develop initiatives to build human capital and institutional capacity, and
using their experience and influence to shape the government policy frameworks
in Tonga.

•For
us, these financial services:

•Have
Reduce our vulnerability;

•and
enable us to manage our small assets in ways that generate income, and for
other options –

•ultimately
it is the creation of pathways out of poverty.

Despite the potential of the banks, their
impact on expanding of economic opportunity has remained limited;

•All have kept the costs and prices
high, and limiting our companies to expand in stages

In conclusion – we see the
opportunity for growth – but we need to create a business model that develop
trust between us borrowers / the savers and the banks:

•So what role of Financial Services
we need in-order to expand economic opportunity

•We need Financing of Capital
Equipment on Industrial Development and on New Industries.

•The Manufacturing Association of
Tonga is developing a business model that includes the entrepreneurs, the
suppliers and the customers in paving the way forward. An industry
investigation mission is planned for Malaysia in April with the intention to
diversify – production to reach economy of scale and develop new industries –
Innovation.